Market Review, Commodities, Currencies, Economic & Corporate Update - 13.12.23

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, led by losses in mining sector stocks.
  • Diversified miners, Anglo American (JO: AGLJ ), African Rainbow Minerals (JO: ARIJ ) and Pan African Resources (JO: PANJ ) plunged 7.6%, 1.7% and 1.1%, respectively.
  • Platinum miners, Impala Platinum (JO: IMPJ ) and Anglo American Platinum (JO: AMSJ ) dropped 5.5% and 1.8%, respectively.
  • Retailers, Pick ‘n Pay Stores (JO: PIKJ ), Mr Price Group (JO: MRPJ ), Foschini Group (JO: TFGJ ) and Shoprite Holdings (JO: SHPJ ) shed 4.4%, 3.1%, 1.5% and 0.9%, respectively.
  • Property developers, Shaftesbury Capital, Growthpoint Properties (JO: GRTJ ) and NEPI Rockcastle N.V. (JO: NRPJ ) declined 2.8%, 1.0% and 0.8%, respectively.
  • Lenders, Standard Bank Group (JO: SBKJ ), Capitec Bank Holdings (JO: CPIJ ), Nedbank Group (JO: NEDJ ) and FirstRand (JO: FSRJ ) fell 2.1%, 2.0%, 1.9% and 1.8%, respectively.
  • The JSE All Share index declined 1.7% to close at 72,621.88.

UK MARKET REVIEW

  • The UK market finished weaker yesterday, weighed down by losses in construction and materials shares.
  • Financial services company, Hargreaves Lansdown (LON: HRGV ) shed 6.7%, after UK’s regulator warned that it would intervene on fees and interest charges.
  • Telecommunications company, BT (LON: BT ) dropped 3.9%, after UK’s regulatory and competition authority, Ofcom proposed a ban on inflation-linked mid-contract price rises.
  • On the other hand, defense and aerospace companies, Rolls Royce Holdings (LON: RR ) and BAE Systems (LON: BAES ) advanced 2.6% and 1.3%, respectively.
  • Pharmaceutical company, AstraZeneca (LON: AZN ) rose 0.8%, after the company agreed to buy respiratory syncytial virus (RSV) vaccine developer Icosavax for a consideration of $1.10bn.
  • The FTSE 100 index marginally declined to close at 7,542.77.

US MARKET REVIEW

  • US markets ended higher yesterday, as investors await the US Federal Reserve’s (Fed) policy decision.
  • Technology companies, Salesforce (NYSE: CRM ) and Microsoft (NASDAQ: MSFT ) advanced 1.7% and 0.8%, respectively.
  • Financial services companies, American Express (NYSE: AXP ), Visa (NYSE: V ) and JPMorgan Chase (NYSE: JPM ) rose 1.6%,1.2% and 0.9%, respectively.
  • On the contrary, cloud technology company, Oracle (NYSE: ORCL ) shed 12.4%, after the company provided a dismal revenue forecast for 3Q23, on slowing demand for its cloud service.
  • Energy companies, Devon Energy Corporation (NYSE: DVN ), Exxon Mobil Corporation (NYSE: XOM ) and Chevron Corporation (NYSE: CVX ) dropped 2.4%, 1.6% and 1.3%, respectively.
  • The S&P 500 index rose 0.5% to settle at 4,643.70, while the DJIA index advanced 0.5% to close at 36,577.94.
  • The NASDAQ index climbed 0.7% to end the trading session at 14,533.40.

ASIA MARKET REVIEW

  • Asian markets are trading mostly lower this morning, ahead of the US Fed interest rate decision and China growth concerns.
  • In Japan, electronics company, Sharp Corporation (TYO: 6753 ) has advanced 5.2%.
  • On the flipside, automobile company, Mitsubishi Motors (TYO: 7211 ) has declined 2.5%.
  • In Hong Kong, real estate company, Longfor (HK: 0960 ) Group Holdings has dropped 3.5%.
  • On the other hand, pharmaceutical company, CSPC Pharmaceutical (HK: 1093 ) has gained 1.1%.
  • In South Korea, pharmaceutical company, Yuyu Pharma (KS: 000220 ) has shed 5.8%.
  • On the contrary, fire extinguishers company, Hanchang Corporation (KS: 005110 ) has surged 8.4%.
  • The Nikkei 225 index is trading 0.4% higher at 32,987.69.
  • The Hang Seng index is trading 0.8% lower at 16,240.16, while the Kospi index is trading 0.4% lower at 2,525.43.

COMMODITIES

  • At 05:30 SAST today, Brent prices fell 0.1% to trade at $73.2/bl.
  • Yesterday, Brent prices fell 3.7% to its lowest level in six months to settle at $73.24/bl, on oversupply concerns. Meanwhile, the American Petroleum Institute (API) reported that crude oil inventories declined by 2.35mn bls in the week ended 8 December 2023.
  • At 05:30 SAST today, gold prices advanced 0% to trade at $1,980.04/oz. Yesterday, gold declined 0.1% to close at $1,979.44/oz.
  • Yesterday, copper marginally declined to close at $8,271.85/mt. Aluminium closed 0.2% lower at $2,121.15/mt.

CURRENCIES

  • Yesterday, the South African rand strengthened against the US dollar. In the US, the consumer price index (CPI) rose on a monthly basis in November.
  • The yield on benchmark government bonds fell yesterday. The yield on the 2030 bond declined to 10.08% while that for the longer-dated 2040 issue fell to 12.42%.
  • At 05:30 SAST, the US dollar is trading 0.3% higher against the South African rand at R18.9887, while the euro is trading 0.2% higher at R20.4895. At 05:30 SAST, the British pound has gained 0.2% against the South African rand to trade at R23.8407.
  • Yesterday, the euro mostly advanced against most of the major currencies. In Germany, the ZEW economic sentiment index advanced to a nine-month high in December. In the eurozone, the ZEW economic sentiment index unexpectedly rose in December. In the UK, the ILO unemployment rate remained unchanged in October.
  • At 05:30 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0789, while it has marginally weakened against the British pound to trade at GBP0.8593.

ECONOMIC UPDATES

  • In the UK, the ILO unemployment rate remained unchanged at 4.2% in October, in line with market expectations.
  • In Germany, the ZEW economic sentiment index unexpectedly rose to a level of 12.80 in December, compared to a level of 9.80 recorded in the previous month.
  • In Germany, the ZEW current situation index rose less than expected to a level of -77.10 in December, compared to a level of -79.80 recorded in the previous month.
  • In the eurozone, the ZEW economic sentiment index unexpectedly climbed to a level of 23.00 in December, compared to a level of 13.80 recorded in the previous month.
  • In the US, the NFIB business optimism index fell to a level of 90.60 in November, compared to a level of 90.70 recorded in the prior month.
  • In the US, the consumer price index (CPI) rose 0.1% on a MoM basis in November, in line with market expectations and compared to a flat reading recorded in the prior month.
  • In the US, monthly budget deficit widened to $314.00bn in November, compared to a deficit of $67.00bn in the previous month.

CORPORATE UPDATES

SOUTH AFRICA

  • Oceana (JO: OCEJ ) calls for urgent action on logistics and energy: Oceana chair Mustaq Brey has called for swift action by the government and Transnet to tackle the mounting challenges that have rendering the country’s ports, railways and harbours increasingly dysfunctional.

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